Geojit Financial Services research report on CIE Automotive India
CIE Automotive India Ltd. (CIE) is the part of a Spain-based, top global forging player with a strong presence in both Europe & India. Currently, 60% of the revenue comes from India, while the rest is from Europe. Despite a softened demand environment, the consolidated revenue declined by a marginal 2% YoY YTD. We believe the domestic demand will pick up in H2, owing to improvement in infra spending. Q3CY24 revenue fell by -6.4% due to subdued growth from European business. Whereas, India business grew by 2% YoY. Meanwhile, EBITDA margin improved by 33bps YoY owing to lower input costs and sustained cost reduction efforts. We expect CIE to maintain a margin in the range of 15-16% in CY25 & CY26. Though the current order will suffice for the required growth in the near term. Global macro turbulence could delay capacity expansion from major OEMs in the EV space and gradually recover in line with industry growth. Increased business with existing customers owing to supplier consolidation, localization and improved content per vehicle is adding value for the company.
Outlook
We rollover our valuation and estimates to CY26 based on the positive long-term outlook in India (2W business) and the Mexican operation. Considering this, we recommend a BUY rating (20x CY26E EPS) with a target price of Rs.578 at CMP.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
